Stocks Slide on Murky Italy Exit Polls

Wall Street gave up early gains and fell into the red as traders tried to make sense of exit poll results streaming out of Italy and grappled with the potential of another election there.

Today's Markets

As of 3:00 p.m. ET, the Dow Jones Industrial Average fell 68 points, or 0.48%, to 13933, the S&P 500 dipped 10.3 points, or 0.68%, to 1506 and the Nasdaq Composite slumped 12.6 points, or 0.4%, to 3149.

The S&P 500 posted a weekly loss for the first time this year last week as traders fretted over a potentially early end of the Federal Reserve's asset purchases. However, the broad-market barometer is still up more than 6% for the year.

The focus was squarely on Italy Monday as voters hit the polls. Initial exit polling indicated the center-left party, one that would likely go easy on austerity measures, was in the lead. However, a poll later in the day suggested the more austerity-friendly center-right party actually stood a chance. Markets in Italy gyrated on the news, with the country's benchmark index shooting up 4% on the original report and then closing the day slightly to the upside.

The Financial Times quoted a senior center-left official as saying the results suggest the country may have to hold another set of elections, ruling out a coalition or unity government.

Italy has come in and out of the spotlight as the country has worked to keep its debt under control while also keeping its economy from contracting further. Its bonds are widely held by banks in Europe, so major moves often ricochet into equities across the continent.

On the corporate front, Lowe's (LOW), the world's second-biggest home improvement store, revealed fourth-quarter results that topped Wall Street's expectations on the top and bottom lines. Home Depot (HD), a Dow component, is out with its results on Tuesday.

Johnson & Johnson (JNJ) said it will take a $100 million, or 4 cents per share, charge in the first quarter as a result of the Venezuelan government's decision to devalue its currency. The health-care giant said its full-year guidance won't be impacted.

The U.S. economic calendar is bare on the day, but will pick up as the week progresses. Traders will get a second look at fourth-quarter gross domestic product, several housing reports, and manufacturing data. Federal Reserve Chairman Ben Bernanke is also set to testify before Congress beginning on Tuesday in an event that is often closely watched.

The deadline to avert sequestration -- $85 billion in federal spending cuts -- is Friday, so market participants may also begin paying closer attention to events on Capitol Hill.

Oil was flat after its worst week since October. The benchmark U.S. contract recently rose 2 cents, or 0.04%, to $93.19 a barrel. Wholesale New York Harbor gasoline dipped 0.17% to $3.074 a gallon. In metals, gold rallied $15.00, or 0.95%, to $1,588 a troy ounce.

Foreign Markets

The Euro Stoxx 50 rose 0.83% to 2652, the English FTSE 100 gained 0.31% to 6355 and the German DAX rallied 1.5% to 7773.

In Asia, the Japanese Nikkei 225 surged 2.4% to 11663 and the Chinese Hang Seng edged higher by 0.17% to 22820.